Public Bill Committee

[Mr. Joe Benton in the Chair]

Schedule 9 agreed to.

Clauses 69 to 71 ordered to stand part of the Bill.

Schedule 10 agreed to.

Clause 72

Powers to seize property to which restraint orders apply

Question proposed, That the clause stand part of the Bill.

Douglas Hogg: We are extending various powers to accredited financial investigators that are currently enjoyed by police officers under the Proceeds of Crime Act 2002, and I am cautious whenever I see a proposal that powers of seizure should be entrusted to somebody other than a police officer. We need some clarification on why that is happening in this case and what safeguards exist.

Vernon Coaker: I will speak to clause 72 and add points that are relevant to one or two of the following clauses. I am aware that the right hon. and learned Member for Sleaford and North Hykeham tabled amendments to leave out this and the subsequent three clauses. As he said, those clauses provide for accredited financial investigators to act under the powers of the 2002 Act. Such investigators already have access to an array of powers: investigating money laundering; investigating the extent and the whereabouts of a suspect’s benefits of crime; and, applying for an order to restrain a person’s assets. Those powers have proved a great success.
The Government recognise the important contribution of the agencies for which such investigators work to the rise in the value of money recovered from criminals. An extension of those powers beyond the police and Her Majesty’s Revenue and Customs to others, such as the Serious Fraud Office, fraud investigators in the Department for Work and Pensions and the immigration service, has strengthened our overall capacity in the recovery of the proceeds of crime. The important point is that we are trying to improve our capacity to recover the proceeds of crime from people who are seeking to gain from criminal activity.
Currently, appropriately accredited financial investigators can apply for restraint orders. Those are interim orders to freeze property and are made in anticipation of a confiscation order following conviction. Police and customs officers have separate powers to seize property, subject to a restraint order, to prevent its removal from their jurisdiction. The clause will extend the powers of accredited financial investigators, giving them the ability to seize such property.

Douglas Hogg: I intervene at this point only because the Minister is nearing the end of his notes. What troubles me is the identity of the accredited financial investigator. We are referred to section 435 of the 2002 Act, which I have here. However, when I go to that section, I find no definition of who the accredited financial investigator is. I tell the Minister that the Committee would be much happier if it knew something about the identity of those individuals who are so undesignated.

Vernon Coaker: The right hon. and learned Gentleman anticipates my remarks. The accredited financial investigators will first undergo training by the National Policing Improvement Agency, which will then accredit them and monitor their performance. Hon. Members will be aware that other clauses move the responsibility for training financial investigators from the Assets Recovery Agency to the National Policing Improvement Agency. Therefore, they will be trained and accredited by the NPIA, will be expected to conform to a code of practice and will be monitored in carrying out their duties. Of course, as well as accrediting them, it will be perfectly possible for the NPIA to take away that accreditation. Its responsibility, therefore, is to accredit people; and, if they go through the appropriate training and are accredited, they will be able to exercise those powers. I am coming to a point that may answer the right hon. and learned Gentleman’s next question.

Douglas Hogg: It may be that I anticipate the next answer. The Minister has told us who will train the financial investigators, and I am jolly glad to know that. But where are they seated; are they private sector characters or are they seated in public organisations? At the moment I do not have a sense of who will employ, instruct and pay them, on whose behalf they will act, and where they are to be found.

Vernon Coaker: As I have said, the right hon. and learned Gentleman’s incisive mind, which we have all come to respect, absolutely anticipates my next remarks. An accredited financial investigator will need to be a member of the staff of a body listed by order by the Secretary of State. Those are public bodies that have a criminal investigation role. They include the Financial Services Authority, the Environment Agency and fraud investigators from the Department for Environment, Food and Rural Affairs. In answer to his point, the accredited financial investigator will need to be a member of such a body, as designated by order by the Secretary of State.

Douglas Hogg: May I sound a word of caution? I listened to the organisations listed by the Minister and I think that we are moving quite a long way from law enforcement agencies. For example, he mentioned some of the DEFRA organisations and the Environment Agency. While they may have some enforcement role to perform, we are moving quite a long way from organisations whose primary responsibility is the enforcement of criminal law. I am not going to oppose the measure, but I do think that there is a problem, and we need to watch carefully those whom he has designated.

Vernon Coaker: I think that the right hon. and learned Gentleman is absolutely right. We all want to recover the proceeds of crime from individuals, and he is quite right to alert the Committee to the extension of powers and sound a note of caution. I give the reassurance that we will, of course, monitor how those powers are used. We expect the NPIA to take its responsibilities very seriously, as it will be the regulatory body for the training of those accredited financial investigators.

Question put and agreed to.

Clause 72 ordered to stand part of the Bill.

Clause 73 ordered to stand part of the Bill.

Schedule 11

Powers to recover cash: financial investigators

Vernon Coaker: I beg to move amendment No. 239, in schedule 11, page 115, line 27, at end insert—
‘ (1) Section 302A (powers for prosecutors to appear in proceedings) (as inserted by section (Powers for prosecutors to appear in cash recovery proceedings)(1) above) is amended as follows.
(2) In subsection (1)—
(a) after “constable”, in the first place where it appears, insert “or an accredited financial investigator”; and
(b) after “constable”, in the second place where it appears, insert “or (as the case may be) an accredited financial investigator”.
(3) After subsection (3) insert—
“(4) The references in subsection (1) to an accredited financial investigator do not include an accredited financial investigator who is an officer of Revenue and Customs but the references in subsection (2) to an officer of Revenue and Customs do include an accredited financial investigator who is an officer of Revenue and Customs.”’.

Joe Benton: With this it will be convenient to discuss the following: Government new clause 17—Powers for prosecutors to appear in cash recovery proceedings.
Government amendment No. 240.

Vernon Coaker: These are relatively minor and technical amendments.

Amendment agreed to.

Schedule 11, as amended, agreed to.

Clause 74 to 76 ordered to stand part of the Bill.

Clause 77

Extension of powers of Revenue and Customs

Question proposed, That the clause stand part of the Bill.

James Brokenshire: The clause will give effect to schedule 12, which will extend the powers in the Regulation of Investigatory Powers Act 2000 to all criminal investigations undertaken by Her Majesty’s Revenue and Customs. The clause has been raised in the context of the ongoing review of HMRC’s powers. The Law Society has raised a number of concerns in relation to the provisions, stating:
“In our responses to the ongoing consultation we have made clear our view that HMRC should not have wider powers than those available to the police.
It is equally vital to ensure that the use of any new powers is authorised at an appropriately senior level within HMRC. At present, the senior authorising officers for the police are Chief Constables (Commissioners for the Metropolitan and City police forces), whereas for HMRC those authorised will be officers of HMRC. We believe the act must make clear the level of seniority required to authorise such intrusive powers and should identify an equivalent level of seniority to that of Chief Constable. In addition, the officers in question should be limited to those in HMRC’s new Criminal Investigations Directorate—as is the case with the proposed powers of arrest—who have received thorough training in the exercise of these powers.”
Those seem sensible and reasonable points. What assurance can the Minister give that they have been or will be addressed?

Vernon Coaker: It may help the Committee if I say a few words about the clause. In answer to the hon. Gentleman, my understanding is that those authorised will be senior officers. At present, only five officers within HMRC are authorised to act in that sphere of work, so it is not a widespread responsibility—only a small number of specially trained officers have it.
Another point worth making to the hon. Gentleman is that work in that area is divided into criminal and civil cases. One aspect of the arrangements that concerned people was that the two parts of HMRC’s operations should not be merged, as they are very distinctive and it is a small, specialised body.
Clause 77 and schedule 12 extend the surveillance powers available to HMRC to tackle serious crime. At the moment, they are available only when the crime relates to an ex-Customs and Excise matter. The clause would make them available also for serious crimes that relate to ex-Inland Revenue matters. The change is necessary to address the emerging patterns of criminality targeting ex-Inland Revenue tax systems, such as self-assessment, tax credits and gift aid. That criminality involves not only the evasion of tax on income or commercial profits, but organised attempts fraudulently to extract money from the Exchequer. For example, in June four people were jailed for a total of 19 years for committing a £1 million fraud involving the gift aid scheme. The extension of the powers would allow HMRC more effectively to investigate and bring to justice criminals engaged in serious attacks on ex-Inland Revenue systems. The powers would help to establish the links between those involved in the criminal activity, the financial structure of the activity, and where the proceeds of the crime are located. For example, the serious criminals behind organised tax credit fraud involving identity theft may engage foot soldiers to operate bank accounts for them. The extended powers would make it easier to establish the links between the foot soldiers and the major players, allowing the full extent of the crime to be uncovered.
HMRC consulted on the change from March 2006 to January 2007. The majority of those who responded were in favour of what is proposed, provided that the powers could be used only in criminal investigations into serious tax crime, and that they continued to be subject to the same safeguards and controls that apply to HMRC criminal investigations into ex-Customs and Excise matters. The same concerns were voiced when the clause was considered in another place. I am pleased to assure the Committee on all those matters. The powers can and will be used only by trained specialist officers who work only on criminal investigations. They cannot be used by other HMRC staff engaged in civil compliance work, such as checking the accuracy of tax returns. The powers cannot be used to inquire into major tax avoidance, on the ground of safeguarding the economic well-being of the UK. They can be used only when necessary, and they must be proportionate to the circumstances.
The interception of communication requires a warrant from the Secretary of State. Intrusive surveillance must be approved by a surveillance commissioner, and the most intrusive property interference also requires the approval of a commissioner. All property interference must be reported to the commissioners, who can quash any authorisation. As the hon. Gentleman will know, use of the powers will be overseen by the independent Interception of Communications Commissioner and the Office of Surveillance Commissioners. Complaints can be made to the investigatory powers tribunal, and HMRC is subject to inspection by HM inspectorate of constabulary. None of that will change.
I assure the hon. Gentleman that only senior officers will be able to apply for warrants, and there will be rigorous internal controls on applications. I think that that is the reassurance that the hon. Gentleman sought. It will involve only a small number of people in HMRC, and only senior directors will be able to apply for warrants.

James Brokenshire: I am grateful to the Minister for his assurance that only a small number of people will be involved. I ask him to reflect on the provisions of schedule 12, particularly whether it could make it clearer precisely who is mandated by the provisions. Will he give an assurance in response to the points raised by the Law Society? If he is able to identify and deal with those points, will he bring forward appropriate amendments on Report?

Vernon Coaker: I think that there are appropriate safeguards, but given the spirit in which the Committee has conducted its business, and without saying that I will bring forward an amendment—I am not making that commitment—I will consider the matter and point out the specific safeguards that we believe are already in place. That, I hope, will answer the points made by the hon. Gentleman and the Law Society. I will consider the matter, but I will not give a commitment to bring forward amendments on Report. Rather, I shall simply consider whether the schedule gives us all the safeguards that we want.

Question put and agreed to.

Clause 77 ordered to stand part of the Bill.

Schedule 12 agreed to.

Clause 78

Power to search for firearms

Douglas Hogg: I beg to move amendment No. 160, in clause 78, page 43, line 10, after first ‘may’, insert
‘, without lawful authority or reasonable excuse,’.

Joe Benton: With this it will be convenient to discuss amendment No. 161, in clause 78, page 43, line 10, after ‘firearms’, insert ‘, explosives or any noxious substance’.

Douglas Hogg: I am conscious, Mr. Benton, that if we were to debate the amendments in some detail it might preclude a stand part debate. For myself, I am content that we should debate the substance of the clause on the amendments, but it is, of course, a matter for you. I intend to deal briefly with the question of firearms through the amendments.

Joe Benton: It is perfectly in order.

Douglas Hogg: I am grateful, Mr. Benton.
Having looked at the legislation that touches on firearms, I doubt whether the amendments are necessary—and I rather doubt whether clause 78 is necessary. However, the amendments at least enable us to explore that conclusion, and perhaps the Minister will give some reassurance.
Amendment No. 160 would ensure that the officer could not exercise the powers conferred on him by clause 78 unless he had reasonable grounds to suspect that firearms were present. That is intended to provide some additional safeguards for the citizen. At the same time, I would extend the power to search and seal to include noxious substances and explosives. The object is to cover the current situation with terrorism.
One needs to ask—I made my opening observation for this reason—what clause 78 brings to the party. What new powers does it confer on the constabulary? It is possible that it confers one—the power to seal off—but I am not sure that it extends the powers of the constabulary beyond that.
I am troubled by the fact that their lordships spent a lot of time on this in the other place. I know Lord Marlesford well, and have a great deal of respect for his judgment. I notice that he tabled this amendment, or something like it, on some three occasions and rallied to his cause a lot of noble Lords, who supported it and incorporated it in the Bill. Therefore, I approach the matter with some diffidence. However, I do have difficulty in understanding why they did that. Section 47 of the Firearms Act 1997 enables a constable, as now is, to stop a person whom he has reasonable grounds for believing to have a firearm, search him, detain him and, if necessary, search his vehicle as well. If I ask what section 78 of the Bill brings to the party, the answer is the sealing-off power, but I am not sure what is meant by sealing off that is not already provided by section 47.
Lord Marlesford attached considerable importance to the use of metal detectors, sensibly making the point that one can use metal detectors without carrying out a physical search, by running them up and down somebody’s clothing. I should have thought that the use of metal detectors already came within the power of search. I do not think that search necessarily means putting one’s hands in people’s pockets, but it could involve a metal detector if one wanted to use one.
Although it is not offensive in any way, I rather doubt that we need section 78. I should be grateful if the Minister would reassure the Committee on that point. Would he also be good enough to address my amendments? I have not checked this, but I suspect that there is already—in terrorism legislation and perhaps also in firearms legislation—a power to search where the officer has reasonable grounds to suppose that noxious substances or explosives are present. If that power does not exist, it should do, and in the absence of that power I would strongly recommend my amendments. However, I might have to support clause 78 in order to incorporate them into law.

James Brokenshire: The clause touches on the apparent need to strengthen the powers of the police to seal off areas in which they suspect that a person or persons may be carrying firearms, and to undertake certain searches.
I know that the Minister takes a close personal interest in the matter. He and I have attended various events at which the families of those affected by gun crime have been present. I am sure that he would agree that we cannot overstate the tragedy of such incidents for the people involved. He was moved, as I was, by an event that we attended recently at City Hall. The testimony of some of the mothers and other close relatives showed the devastating impact of that terrible crime on many families in this country. Last year, 50 people lost their lives through gun crime. I am sure that the Committee will agree that that is 50 people too many.
I am on record as having said that we need to be careful in examining the issue and considering whether further stop-and-search powers are required. I stand by that. However, we are prepared to support measures if there is an identified gap in the law, or if it can be demonstrated that the measures are appropriate and necessary and would make a significant impact in terms of dealing with this appalling crime.
Clearly the culture of carrying weapons needs to be changed. It can be either for the protection, or perceived protection, of the person involved, or as part of asserting some sort of status within a criminal gang culture. Getting guns off the streets must be an essential part of the strategy to deal with serious violent crime. We must also do all that we can to prevent weapons getting into this country in the first place, which is why we support the establishment of a border police force to strengthen our borders. We would also support measures to examine more closely items coming into this country using the postal or courier services to ensure that weapons are not being smuggled in.
There is also the cultural issue that I have talked about. We have to challenge the guns and gangs culture, strengthen communities and the family unit and undermine the criminal gangs. These gangs seek to recruit more vulnerable members of the community into a pattern of crime, which, once they are engaged within it, is extremely hard although not impossible to break. They also seek to disrupt the traditional bonds of kinship and family and other linkages within society that might prevent that type of activity.
My right hon. and learned Friend’s amendment is about effective law enforcement and ensuring that the police have appropriate powers to address this problem. Lord Marlesford, in moving his amendment which is now incorporated into the Bill as clause 78, said:
“The purpose of the amendment is very simple: it is to help to get guns off Britain’s streets, and thus to reduce gun crime, which is causing misery not just to those who tragically get caught up in it but to the far greater number whose anxiety has been growing over recent years. Whether they are right or wrong, they perceive themselves as vulnerable. The amendment would give the police a simple and over-riding power which would enable them to make it far more risky for anyone to carry an illegal firearm.”—[Official Report, House of Lords, 30 April 2007; Vol. 691, c. 917.]
The Minister will no doubt say in response to that point that the police have not asked for these powers, that the Association of Chief Police Officers says it is not necessary and that there is no gap in the law. However, their lordships felt that there was a shortcoming. My right hon. and learned Friend has identified a number of potential issues that need to be examined closely to see whether there is a gap in the law. As currently drafted the clause appears to have a very wide ambit. For example, it can designate an area within which a search for firearms can be conducted. The meaning and scope of that need to be examined carefully. This provision would therefore need to be amended and refined in some way and it is certainly something that must be looked at actively if the clause is included in the Bill.
I note that my right hon. and learned Friend seeks to extend the ambit of the clause by including explosives and noxious substances. I would prefer to consider those aspects as part of the Privy Council review of terrorism, given that it touches on those sorts of issues. It might be more appropriate to consider the way forward in the light of how the Privy Council committee reports back on the serious issue of terrorism more generally. We hope it will come forward with constructive solutions and proposals that can gain cross-party support.
We understand that concerns have been raised in relation to the clause and its scope. However, the noble Lord makes the more general point that we need to consider carefully whether we need enhanced powers. We are prepared to work with the Minister to discuss any measures that might be appropriate, and if he is minded to table an amendment on Report or to consider other proposals, then, subject to that discussion, he would have our support if appropriate measures are deemed to be necessary and are brought forward.
In that context, therefore, although I note that the Minister will no doubt seek the wholesale deletion of this clause, I would ask him to reflect carefully on the points that my right hon. and learned Friend made about the issues that might arise from this clause, which is why he tabled his amendments. Before discounting this clause out of hand, the Minister should also examine whether a clause of some form should be retained in the Bill that might address certain issues that have obviously been of concern to their lordships and which may be required to ensure that our law enforcement agencies have the power and authority to intervene appropriately to combat this appalling crime, which claims too many lives in this country each year.

Jeremy Browne: Thank you very much, Mr. Benton, for giving me the opportunity to speak to clause 78 and amendments Nos. 160 and 161.
I start with an understanding of what their lordships were trying to achieve, because if one looks at the backdrop to this clause there is a great deal of cause for concern. Last year, for example, there were 46 homicides involving firearms in the UK. In 2005-06, there were 4,036 robberies involving firearms, a 10 per cent. increase on the previous year. Handguns were used in 4,652 offences during 2005-06, an increase of 7 per cent. on the previous year. Finally, shotguns were used in 639 offences during 2005-06, a 7 per cent. increase on the previous year.
We now have in this country a serious and escalating gun crime problem; it is not necessarily escalating in every category, but the overall trend is clearly upwards. The police have responded to that problem. Fifty-five per cent. of firearms offences occur in the areas covered by just three metropolitan forces: the Metropolitan police here in London, the force in Greater Manchester and the West Midlands police. They have all put in place specific programmes and initiatives to try to deal with gun crime. Of course, the temptation for us as legislators is always to think that the solution to problems of this sort is additional legislation. It may be, in part, the solution on some occasions, but the solution is also, of course, partly about the operational initiatives undertaken by the police.
So we have this problem and that was no doubt the reason for the new clause being introduced in the first place, and also for the House of Lords deciding to support it. However, having said all of that, when one reads the clause there are many reasons for concern. I note that the right hon. and learned Member for Sleaford and North Hykeham said, during his contribution a few moments ago, that he did not regard the clause as being “offensive in any way”. Well, I was quite surprised that he said that, because there are reasons why people who are concerned about civil liberties—I know that he is one of them—would have reservations about the drafting of this clause.
For example, it gives any officer, even the lowest ranked officer, the power to seal off an area—that area is not defined—by any means necessary, which is an extremely wide remit, if he has “reason to believe”, which again is an extremely wide remit, that something is being done that is untoward involving a firearm.

Douglas Hogg: Of course, the hon. Gentleman will also remember that one of my amendments would require the officer to have reasonable grounds to believe.

Jeremy Browne: I take the point. The right hon. and learned Gentleman’s amendments would improve the clause, but he said that he might not wish to move them because he might see merit in removing the clause altogether. My view is that, although the motivation behind the clause is honourable, the provisions of the Criminal Justice and Public Order Act 1994 give the police the powers that they require to deal with the problem. What is more, they are more tightly drafted than the clause and more likely to ensure a balance between giving the police the rightful ability to exercise their power to protect the public and reassuring the public that their liberties are safeguarded.
The existing legislation is more practical in its application than this widely drafted clause. For those reasons, subject to what the Minister says, I suspect that there will be a consensus that, although politicians must repeatedly turn to this issue to try to deal with the problems, the clause is not the best way to do so.

Vernon Coaker: I thank the Opposition Members who have contributed to this important debate, which is of concern to everybody throughout the country. Everybody wants to see gun crime and firearms-related offences fall. Notwithstanding the points that the hon. Member for Taunton made about the number of homicides, the overall number of firearms offences in the year to December 2006 fell by 16 per cent. Although there are issues to be resolved, there are also some good points worth mentioning.
To the right hon. and learned Member for—

Douglas Hogg: Sleaford and North Hykeham.

Vernon Coaker: Yes, we will get there in the end. Sleaford at five to one.

James Brokenshire: The hon. Member for Gelding.

Vernon Coaker: We all have problems with what our constituencies are called.
I agree with much of what the right hon. and learned Member for Sleaford and North Hykeham said and I agree with the purpose of his amendments. The Government will vote against the inclusion in the Bill of clause 78, which will account for one of his amendments. With respect to his other point, I understand that the power to search for explosives and so on is contained in other terrorism-related legislation. Such points might be subject to the review to which his hon. Friend the Member for Hornchurch alluded. From those comments, I hope that it will be clear that the amendments are unnecessary. The Government will vote against the clause; the other amendment is covered in other legislation.
The hon. Member for Hornchurch mentioned the various events that we have been to together. He made a point about the force of argument that the families of victims bring to the debate. I know such families in Nottingham and I have become friends with some of them. In one case, I was friends with a family before their son became a victim of gun crime. I find it remarkable that those families often turn their grief to the pursuit of a way to reduce gun crime in the future. Those people, whose lives have been devastated by an appalling murder, have the power and strength to turn their grief towards something positive. One cannot fail to be moved by those families, as were the hon. Gentleman and I and many hundreds of other people at City Hall.
With all due humility, I say that I am not often accused of saying that it is important to protect the subject’s civil liberties. It am often accused of quite the opposite—of riding roughshod over centuries of tradition and the civil liberties of individuals. In this case, although no one can doubt that the intention of those who tabled the clause is to reduce gun crime, we have to be proportionate and sensible about it, and the power proposed in the clause is draconian. Do we really want a police constable who suspects that there might be a gun in an area to be able to seal off that area, with no specification as to its size, with no limit or safeguard in respect of the length of time that should be allowed for, and without any reference to a senior officer? That leaves aside the practicality of such an operation, which would involve hundreds of police, blue tape and goodness knows what else.
We have debated in this and many other Bills the need to limit arbitrary powers, and I, and many other hon. Members, find it strange that notwithstanding their good intent their lordships have introduced a proposal that does something that they most often rail against us for doing. In many respects, it is a role-reversal; we are saying that the clause pushes too far and that we cannot just ride roughshod over subjects’ civil liberties.
The public want as much as possible to be done to combat crime, and especially gun crime, but if people understood the powers that would be given to an individual police officer in these circumstances the vast majority would not find it acceptable. I therefore ask the Committee to vote against clause stand part.
Clause 78 introduces additional powers for the police to seal off areas to search for firearms, but there is already sufficient legislation, as the right hon. and learned Member for Sleaford and North Hykeham said. Section 47 of the Firearms Act 1968 gives the police powers to detain and search, and a constable may enter any place to exercise those powers. Powers to stop and search without reasonable suspicion within a specified area are provided by section 60 of the Criminal Justice and Public Order Act 1994, but under strict and appropriate safeguards. ACPO has strongly confirmed that it is fully satisfied with its powers in that respect, and that it is concerned about the wide and unnecessary extension of powers provided by the clause. Liberty has also expressed its concerns, and agrees with our position on the complete lack of safeguards in the provision, which shows that we do listen to Liberty.
Under the proposed power, any constable can decide to seal off an area with no requirement to inform a senior officer, no indication of the extent of the area and with no specified time limit. It is a disproportionate provision, which could affect certain communities.

Margaret Moran: I commend the Minister’s remarks. Will he join me in commending the family of Police Constable John Henry who was shot in Luton in my constituency a few weeks ago, and the work they are doing to bring communities together? I am aware from the Minister’s remarks that the provisions could damage community relations in Luton, because they would be wide open to complaints about abuse by the police should they be enacted. That is a strong reason why the clause should be removed.

Vernon Coaker: I thank my hon. Friend for her remarks. I support what she said about PC John Henry and the work that his family are doing to try to reduce gun crime, and to get something out of that tragedy by ensuring that such awful events do not take place. My hon. Friend makes the important point that if we are not careful with legislation, we damage community relations and contribute to disorder. We must be careful. Although we want to tackle gun crime, we must ensure that the legislation that we pass is proportionate.
Appropriate, proportionate, intelligence-led policing such as that conducted by the Metropolitan police through Operation Trident has proved to be successful in tackling gun crime. Stigmatising certain communities by cordoning off areas, which could happen under this clause, as my hon. Friend pointed out, would not achieve that goal or help to develop community cohesion. Our view is that the clause is both unnecessary and potentially harmful. I ask the right hon. and learned Member for Sleaford and North Hykeham to withdraw his amendments, and I ask hon. Members to oppose the clause.

Douglas Hogg: I shall not put my amendments to a vote. I am satisfied that the provisions of section 47 of the 1968 Act cover the situation adequately. I am also persuaded by what the Minister has said on the ambit of the powers contained in clause 78. They go too far. I shall not vote to retain the clause in the Bill. I also take the opportunity to say to you, Mr. Benton, and through you to their noble lordships in the other place, that I hope they will not try to reinsert the clause in the Bill. If they send it back to this House, I will not support it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 disagreed to.

Clause 79

Orders of the Secretary of State and the Scottish Ministers

Amendment proposed: No. 188, in clause 79, page 43, line 18, after ‘Secretary of State’, insert ‘, the Treasury’.—[Mr. Coaker.]

Joe Benton: With this it will be convenient to discuss the following:
Government amendments Nos. 189 to 191.
Government new clause 14—Disclosure of information by Revenue and Customs.
Government amendment No. 197.

Amendment agreed to.

Amendments made: No. 189, in clause 79, page 43, line 20, after ‘Secretary of State’, insert ‘or the Treasury’.
No. 190, in clause 79, page 43, line 25, after ‘Secretary of State’, insert
‘or (as the case may be) the Treasury’.—[Mr. Coaker.]

Jeremy Browne: I beg to move amendment No. 12, in clause 79, page 43, line 26, after ‘58(3)’, insert ‘, 63,’.

Joe Benton: With this it will be convenient to discuss amendment
No. 11, in clause 79, page 43, line 34, leave out ‘or 63’.

Jeremy Browne: These amendments, taken together, would require affirmative resolution for the Secretary of State to be able to specify an anti-fraud organisation, such as the Credit Industry Fraud Avoidance Scheme, under clause 63. Clause 63 currently allows the Secretary of State to specify by negative resolution an anti-fraud organisation to which a public authority may disclose information. In the other place there was some concern at the arrangements surrounding the Secretary of State’s ability to designate anti-fraud organisations, and what the criteria for acceptability would be. As sensitive issues of privacy, secrecy and security surround these data matching powers, and the likelihood is that only a handful of organisations will be capable of appropriately undertaking the task, the change from negative to affirmative resolution will allow an appropriate level of parliamentary scrutiny.
On Second Reading in the House of Commons, the Government repeatedly indicated that they would not wish to have a monopoly of one organisation processing this data sharing and going forward with this initiative. Although that is welcome, it should be within the remit of Parliament to scrutinise and approve other organisations that the Secretary of State may name. That is why I have tabled amendments Nos. 12 and 11.

Douglas Hogg: I rise to support the amendments on the general basis of parliamentary control. Wherever I see provisions for an order, I like to see it subject to an affirmative resolution procedure. Whenever I see that provisions relate to the affirmative resolution procedure, I say that such measures are not amendable and that they are therefore bad news. If we have to have such procedures at all, why can we not have the super-affirmative procedure? That might be going too far on this occasion, so I back the amendments.

James Brokenshire: The hon. Member for Taunton made an interesting point on the mechanism by which anti-fraud organisations will be specified. The Minister will be aware that concerns were expressed about data sharing when we debated chapter 1 of part 3 of the Bill. It is therefore relevant to consider having a mechanism to ensure that specified organisations are subject to a greater degree of scrutiny. Certainly, the positive procedure would appear to be the appropriate way to provide an element of control. I therefore look forward to the Minister’s response.

Vernon Coaker: The provisions were scrutinised by the Delegated Powers and Regulatory Reform Committee, which found that the negative procedure for the specification of anti-fraud organisations represented an
“appropriate level of parliamentary scrutiny”.
As far as I am aware, the order-making powers in the Bill conform to that Committee’s report.
I shall resist the amendments, but I should say something about clause 63 to explain why. Clause 63 provides a new legal gateway for those public authorities that need it to allow them to disclose information to a specified anti-fraud organisation for the purpose of preventing fraud. The gateway is necessary because fraudsters do not limit their criminal activities to either the public or private sector; rather, they are opportunists who seek to exploit any weaknesses that they can. Enabling public sector organisations to share information in a clearly-defined and secure way—namely, through a specified anti-fraud organisation—will allow the private and public sector to work together to prevent fraud and associated losses.
The amendments would change the order-making power for specifying an anti-fraud organisation from negative to affirmative resolution. The data-sharing provisions in clauses 63 to 66 were scrutinised by the Delegated Powers and Regulatory Reform Committee. It found that the negative resolution for the specification of the anti-fraud organisation or organisations represented the
“appropriate level of parliamentary scrutiny”.
As the Government seek to specify such bodies, we will ensure that any anti-fraud organisation that facilitates sharing between public authorities under clause 63 has appropriate safeguards, not least so that it complies with the relevant data protection and human rights legislation.
In addition, Government new clause 11 will introduce a requirement on the Secretary of State to produce a code of practice. Public authorities sharing information through a specified anti-fraud organisation will have to have regard to the code when using their powers. The specification process will in part depend on whether a potential specified anti-fraud organisation operates in compliance with the code. In short, specified anti-fraud organisations will have to prove that they are capable of sharing and protecting information in an appropriate manner.
In those circumstances, I question the need for the specification of anti-fraud organisations to be subject to affirmative resolution in both Houses of Parliament. That would be an unnecessary degree of parliamentary oversight—that view is shared by the Delegated Powers and Regulatory Reform Committee. I therefore ask the hon. Member for Taunton to withdraw the amendment.

Jeremy Browne: Although I am grateful for the Minister’s contribution, I wish to test the views of the Committee.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 9.

Question accordingly negatived.

Amendment proposed: No. 163, in clause 79, page 43, line 27, leave out from ‘8,’ to end of line 28 and insert
‘except under the super-affirmative resolution procedure as set out in section 18 of the Legislative and Regulatory Reform Act 2006 (c. 51).’.—[Mr. Hogg.]

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 9.

Question accordingly negatived.

Amendments made: No. 200, in clause 79, page 43, line 34, after ‘29(6) or (11),’, insert
‘(Powers to wind up: supplementary),’.
No. 191, in clause 79, page 43, line 34, leave out ‘or 63’ and insert
‘, 63 or (Disclosure of information by Revenue and Customs)’.—[Mr. Coaker.]

Clause 79, as amended, ordered to stand part of the Bill.

Clauses 80 and 81 ordered to stand part of the Bill.

Schedule 14

Transitional and transitory provisions and savings

Maria Eagle: I beg to move amendment No. 170, in schedule 14, page 121, line 41, at end insert—
‘ (1) This paragraph applies where, in any proceedings—
(a) a person (“D”) is charged in respect of the same act both with an offence under section 41 and with the common law offence of inciting the commission of another offence;
(b) the only thing preventing D from being found guilty of the offence under section 41 is the fact that it has not been proved beyond reasonable doubt that the time when the act took place was after the coming into force of that section; and
(c) the only thing preventing D from being found guilty of the common law offence is that it has not been proved beyond reasonable doubt that that time was before the coming into force of section 55.
(2) For the purpose of determining D’s guilt it shall be conclusively presumed that the time when the act took place was before the coming into force of section 41.’.
I hope to convince the Committee, in fairly short order, that the amendment will make sensible changes to the present transitional arrangements, as originally proposed by the Law Commission. The transition provisions should set out more clearly what is to happen if it cannot be determined when an act of intentional encouragement took place.
The Committee will remember from our debates on part 2 and clause 41 that the offence of intentional encouragement was covered by the common law offence of incitement, which criminalised it, but the clause now criminalises both intentional encouragement and assistance; in other words, the intentional encouragement bit of the offence, although new, is continuous. It was an offence under the common law and it remains an offence under the Bill. It should therefore be possible to prosecute an act of intentional encouragement whenever it took place—before or after the commencement of part 2.
The amendment provides that if a person is charged in respect of his conduct with the common law offence of incitement or of an offence under clause 41, and it is not possible to establish whether the conduct took place before or after the commencement of part 2—

Douglas Hogg: We put our hands up.

Maria Eagle: The right hon. and learned Gentleman puts his hands up, which means that I have probably convinced the Committee. This might be the opportunity for me to sit down.

James Brokenshire: The Minister has clearly set out her case for the amendment, which is to ensure that there is no break in the way that the provisions operate. I believe that is entirely understandable and, therefore, we will not seek to oppose the amendment.

Amendment agreed to.

Schedule 14, as amended, agreed to.

Clause 82 ordered to stand part of the Bill.

Schedule 15

Repeals and revocations

Amendments made: No. 192, in schedule 15, page 122, line 33, column 2, at end insert—
‘In section 51(1A), the words “, subject to section 33(1A) of this Act,”.’.
No. 193, in schedule 15, page 127, line 38, column 2, at end insert—
‘Section 376.’.—[Mr. Coaker.]

Schedule 15, as amended, agreed to.

Clause 83

Extent

Amendments made: No. 194, in clause 83, page 44, line 27, after ‘(2);’, insert—
‘( ) section (Powers of management receivers and enforcement receivers)(1) and (2);’.
No. 201, in clause 83, page 44, line 32, leave out ‘29’ and insert ‘(Powers to wind up: supplementary)’.
No. 195, in clause 83, page 45, line 6, after ‘(4);’, insert—
‘( ) section (Powers of management receivers and enforcement receivers)(3) and (4);’.—[Mr. Coaker.]

Clause 83, as amended, ordered to stand part of the Bill.

Clause 84 ordered to stand part of the Bill.

Clause 85

Short title

Amendment made: No. 196, in clause 85, page 45, line 41, leave out subsection (2).—[Mr. Coaker.]

Clause 85, as amended, ordered to stand part of the Bill.

New Clause 8

Institution of proceedings for an offence under this Part
‘(1) Any provision to which this section applies has effect with respect to an offence under this Part as it has effect with respect to the anticipated offence.
(2) This section applies to provisions made by or under an enactment (whenever passed or made) that—
(a) provide that proceedings may not be instituted or carried on otherwise than by, or on behalf or with the consent of, any person (including any provision which also makes exceptions to the prohibition);
(b) confer power to institute proceedings;
(c) confer power to seize and detain property;
(d) confer a power of forfeiture, including any power to deal with anything liable to be forfeited.
(3) In relation to an offence under section 43—
(a) the reference in subsection (1) to the anticipated offence is to be read as a reference to any offence specified in the indictment; and
(b) each of the offences specified in the indictment must be an offence in respect of which the prosecutor has power to institute proceedings.
(4) Any consent to proceedings required as a result of this section is in addition to any consent required by section 50.’.—[Maria Eagle.]

Brought up, and read the First time.

Maria Eagle: I beg to move, That the clause be read a Second time.
The new clause ensures that the powers that apply to a substantive offence would also apply to an offence of encouraging or assisting that offence. It is entirely sensible and one of the main purposes of the entire reform of the criminal law that part 2 represents that this be the case. There is already similar provision in section 2 of the Criminal Attempts Act 1981 to ensure that powers applying to substantive offences also apply to attempts. Therefore, there is nothing out of order here; it is simply joining up the system. On that basis, I hope that the Committee will be able to accept the new clause.

James Brokenshire: The Minister has explained that this is a question of consistency. The new clause ensures that the amendment to inchoate offences as proposed by the Law Commission is effective and holds together as intended. On that basis, we will not oppose new clause 8.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 9

No individual liability in respect of corporate manslaughter
‘In section 18 of the Corporate Manslaughter and Corporate Homicide Act 2007 (c. 00) (no individual liability for offences under that Act) after subsection (1) insert—
“(1A) An individual cannot be guilty of an offence under Part 2 of the Serious Crime Act 2007 (encouraging or assisting crime) by reference to an offence of corporate manslaughter.”’.—[Maria Eagle.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 11

Code of practice for disclosure of information to prevent fraud
‘(1) The Secretary of State must prepare, and keep under review, a code of practice with respect to the disclosure, for the purposes of preventing fraud or a particular kind of fraud, of information by public authorities as members of specified anti-fraud organisations or otherwise in accordance with any arrangements made by such organisations.
(2) Before preparing or altering the code, the Secretary of State must consult—
(a) any specified anti-fraud organisation;
(b) the Information Commissioner; and
(c) such other persons as the Secretary of State considers appropriate.
(3) A public authority must have regard to the code in (or in connection with) disclosing information, for the purposes of preventing fraud or a particular kind of fraud, as a member of a specified anti-fraud organisation or otherwise in accordance with any arrangements made by such an organisation.
(4) Nothing in this section applies in relation to any disclosure by a relevant public authority of information whose subject-matter is a matter about which provision would be within the legislative competence of the Scottish Parliament if it were included in an Act of the Scottish Parliament.
(5) The Secretary of State must—
(a) lay a copy of the code, and of any alterations to it, before Parliament; and
(b) from time to time publish the code as for the time being in force.
(6) In this section—
“information” and “public authority” have the same meaning as in section 63;
“relevant public authority” has the meaning given by section 63(6); and
“specified anti-fraud organisation” means any person which is a specified anti-fraud organisation for the purposes of section 63.’.—[Mr. Coaker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 13

Powers of management receivers and enforcement receivers
‘(1) After section 49(8) of the Proceeds of Crime Act 2002 (c. 29) (opportunity for persons to make representations before powers conferred on management receivers to manage or otherwise deal with property: England and Wales) insert—
“(8A) Subsection (8), so far as relating to the power mentioned in subsection (2)(b), does not apply to property which—
(a) is perishable; or
(b) ought to be disposed of before its value diminishes.”
(2) After section 51(8) of that Act (opportunity for persons to make representations before powers conferred on enforcement receivers to manage or otherwise deal with property: England and Wales) insert—
“(8A) Subsection (8), so far as relating to the power mentioned in subsection (2)(b), does not apply to property which—
(a) is perishable; or
(b) ought to be disposed of before its value diminishes.”
(3) After section 197(8) of that Act (opportunity for persons to make representations before powers conferred on management receivers to manage or otherwise deal with property: Northern Ireland) insert—
“(8A) Subsection (8), so far as relating to the power mentioned in subsection (2)(b), does not apply to property which—
(a) is perishable; or
(b) ought to be disposed of before its value diminishes.”
(4) After section 199(8) of that Act (opportunity for persons to make representations before powers conferred on enforcement receivers to manage or otherwise deal with property: Northern Ireland) insert—
“(8A) Subsection (8), so far as relating to the power mentioned in subsection (2)(b), does not apply to property which—
(a) is perishable; or
(b) ought to be disposed of before its value diminishes.”’.—[Mr. Coaker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 14

Disclosure of information by Revenue and Customs
‘(1) This section applies to information held as mentioned in section 18(1) of the Commissioners for Revenue and Customs Act 2005 (c. 11) (confidentiality).
(2) Information to which this section applies may be disclosed by or with the authority of the Commissioners of Revenue and Customs—
(a) to the Criminal Assets Bureau in Ireland (“the CAB”) for the purpose of enabling or assisting the CAB to exercise any of its functions in connection with any matter within subsection (3); or
(b) to any specified public authority (in the United Kingdom or elsewhere)—
(i) for the purpose of enabling or assisting the public authority to exercise any of its functions in connection with any matter within subsection (3); or
(ii) (if the specifying order so provides) for the purpose of enabling or assisting the public authority to exercise any of its functions in connection with any matter within that subsection that is specified, or of a description specified, in the order.
(3) The matters within this subsection are—
(a) the identification of proceeds of crime;
(b) the bringing of civil proceedings for enforcement purposes in relation to proceeds of crime; and
(c) the taking of other action in relation to proceeds of crime.
(4) Information disclosed in accordance with subsection (2) must not be further disclosed except—
(a) in connection with the exercise of any of the functions of the CAB or a specified public authority in connection with any matter within subsection (3) (or, in a subsection (2)(b)(ii) case, any such matter as is mentioned there); and
(b) with the consent of the Commissioners of Revenue and Customs or an authorised officer of the Commissioners of Revenue and Customs.
(5) For the purposes of this section any consent or authorisation may be general or specific.
(6) If a person in the United Kingdom discloses, in contravention of subsection (4), any revenue and customs information relating to a person whose identity—
(a) is specified in the disclosure; or
(b) can be deduced from it;
section 19 of the 2005 Act (wrongful disclosure) applies in relation to that disclosure as it applies in relation to a disclosure of such information in contravention of section 20(9) of that Act.
(7) Any reference in this section to a disclosure to the CAB or a specified public authority is a reference to a disclosure to such person, or to persons of such description, as may be specified in relation to the CAB or the public authority (as the case may be).
(8) Nothing in this section authorises any disclosure of information which—
(a) contravenes the Data Protection Act 1998 (c. 29); or
(b) is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000 (c. 23).
(9) In this section—
“the 2005 Act” means the Commissioners for Revenue and Customs Act 2005 (c. 11);
“assets” means property of any description, wherever situated;
“civil proceedings” means civil proceedings of whatever nature and whether brought in the United Kingdom or elsewhere;
“Commissioners of Revenue and Customs” means the Commissioners for Her Majesty’s Revenue and Customs;
“enforcement purposes”, in relation to the proceeds of crime, means with a view to—
(a) recovering, forfeiting or freezing assets constituting proceeds of crime; or
(b) otherwise depriving persons (to any extent) of, or of access to, such assets or the benefit of such assets;
“functions” includes powers, duties and objectives, and references to the exercise of functions include the pursuit of objectives;
“proceeds of crime” means assets derived, or suspected to be derived, directly or indirectly from criminal conduct (wherever occurring);
“public authority” means any body or person discharging functions of a public nature;
“revenue and customs information relating to a person” has the meaning given by section 19(2) of the 2005 Act;
“specified” means specified in an order made by the Treasury; and
“the specifying order”, in relation to a specified public authority, means the order specifying the authority for the purposes of this section.’.—[Mr. Coaker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 15

Powers to wind up: supplementary
‘(1) The Secretary of State may by order make such modifications as he considers appropriate to the application of—
(a) the Insolvency Act 1986 (c. 45) by virtue of section 28(2); or
(b) the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I.19)) by virtue of section 29(2).
(2) Any modifications made by virtue of subsection (1) are in addition to the modifications made by section 28(3) and (4) or (as the case may be) section 29(3) and (4).
(3) The Secretary of State may by order make such consequential or supplementary provision, applying with or without modifications any provision made by or under an enactment, as he considers appropriate in connection with section 28(2) to (4) or 29(2) to (4).
(4) An order made by virtue of section 28(5) or (6), section 29(5) or (6) or subsection (1) above may, in particular, contain consequential or supplementary provision applying, with or without modifications, any provision made by or under an enactment.’.—[Mr. Coaker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 16

Providers of information society services
‘(1) A serious crime prevention order may not include terms which restrict the freedom of a service provider who is established in an EEA state other than the United Kingdom to provide information society services in relation to an EEA state unless the conditions in subsections (2) and (3) are met.
(2) The condition in this subsection is that the court concerned considers that the terms—
(a) are necessary for the objective of protecting the public by preventing, restricting or disrupting involvement in—
(i) in the case of an order in England and Wales, serious crime in England and Wales; and
(ii) in the case of an order in Northern Ireland, serious crime in Northern Ireland;
(b) relate to an information society service which prejudices that objective or presents a serious and grave risk of prejudice to it; and
(c) are proportionate to that objective.
(3) The conditions in this subsection are that—
(a) a law enforcement officer has requested the EEA state in which the service provider is established to take measures which the law enforcement officer considers to be of equivalent effect under the law of the EEA state to the terms and the EEA state has failed to take the measures; and
(b) a law enforcement officer has notified the Commission of the European Communities and the EEA state of—
(i) the intention to seek an order containing the terms; and
(ii) the terms.
(4) It does not matter for the purposes of subsection (3) whether the request or notification is made before or after the making of the application for the order.
(5) A serious crime prevention order may not include terms which impose liabilities on service providers of intermediary services so far as the imposition of those liabilities would result in a contravention of Article 12, 13 or 14 of the E-Commerce Directive (various protections for service providers of intermediary services).
(6) A serious crime prevention order may not include terms which impose a general obligation on service providers of intermediary services covered by Articles 12, 13 and 14 of the E-Commerce Directive—
(a) to monitor the information which they transmit or store when providing those services; or
(b) actively to seek facts or circumstances indicating illegal activity when providing those services.
(7) For the purposes of this section—
(a) a service provider is established in a particular EEA state if he effectively pursues an economic activity using a fixed establishment in that EEA state for an indefinite period and he is a national of an EEA state or a company or firm mentioned in Article 48 of the EEC Treaty;
(b) the presence or use in a particular place of equipment or other technical means of providing an information society service does not, of itself, constitute the establishment of a service provider;
(c) where it cannot be determined from which of a number of establishments a given information society service is provided, that service is to be regarded as provided from the establishment where the service provider has the centre of his activities relating to the service;
and references to a person being established in an EEA state are to be read accordingly.
(8) In this section—
“the E-Commerce Directive” means Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce);
“information society services”—
(c) has the meaning given in Article 2(a) of the E-Commerce Directive (which refers to Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations); and
(d) is summarised in recital 17 of the E-Commerce Directive as covering “any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service”;
“intermediary services” means an information society service which—
(e) consists in the provision of access to a communication network or the transmission in a communication network of information provided by a recipient of the service;
(f) consists in the transmission in a communication network of information which—
(i) is provided by a recipient of the service; and
(ii) is the subject of automatic, intermediate and temporary storage which is solely for the purpose of making the onward transmission of the information to other recipients of the service at their request more efficient; or
(g) consists in the storage of information provided by a recipient of the service;
“recipient”, in relation to a service, means any person who, for professional ends or otherwise, uses an information society service, in particular for the purposes of seeking information or making it accessible; and
“service provider” means a person providing an information society service.
(9) For the purposes of paragraph (a) of the definition of “intermediary services”, the provision of access to a communication network and the transmission of information in a communication network includes the automatic, intermediate and transient storage of the information transmitted so far as the storage is for the sole purpose of carrying out the transmission in the network.
(10) Subsection (9) does not apply if the information is stored for longer than is reasonably necessary for the transmission.’.—[Mr. Coaker.]

Brought up, and read the First time.

Vernon Coaker: I beg to move, That the clause be read a Second time.
For the Committee’s information, the new clause is very technical in nature and ensures simply that part 1 is compliant with the terms of the e-commerce directive.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 17

Powers for prosecutors to appear in cash recovery proceedings
‘(1) After section 302 of the Proceeds of Crime Act 2002 (c. 29) (recovery of cash in summary proceedings: compensation) insert—
“302A Powers for prosecutors to appear in proceedings
(1) The Director of Public Prosecutions or the Director of Public Prosecutions for Northern Ireland may appear for a constable in proceedings under this Chapter if the Director—
(a) is asked by, or on behalf of, a constable to do so, and
(b) considers it appropriate to do so.
(2) The Director of Revenue and Customs Prosecutions may appear for the Commissioners for Her Majesty’s Revenue and Customs or an officer of Revenue and Customs in proceedings under this Chapter if the Director—
(a) is asked by, or on behalf of, the Commissioners for Her Majesty’s Revenue and Customs or (as the case may be) an officer of Revenue and Customs to do so, and
(b) considers it appropriate to do so.
(3) The Directors may charge fees for the provision of services under this section.”
(2) After section 2C(3) of that Act (prosecuting authorities) (as inserted by Schedule 8 to this Act) insert—
“(3A) Subsection (3) does not apply to the functions of the Director of Public Prosecutions, the Director of Public Prosecutions for Northern Ireland and the Director of Revenue and Customs Prosecutions under section 302A.”’.
(3) After section 38(1) of the Commissioners for Revenue and Customs Act 2005 (c. 11) (conduct of prosecutions on behalf of the Office) insert—
“(1A) An individual who is not a member of the Office may be appointed by the Director to appear in—
(a) specified proceedings, or
(b) a specified class or description of proceedings,
in which the Director or a Prosecutor would otherwise appear by virtue of section 302A of the Proceeds of Crime Act 2002 (c. 29) (cash recovery proceedings).”
(4) After section 39(1) of that Act (designation of non-legal staff) insert—
“(1A) The Director may designate a member of the Office to appear in—
(a) specified proceedings, or
(b) a specified class or description of proceedings,
in which the Director or a Prosecutor would otherwise appear by virtue of section 302A of the Proceeds of Crime Act 2002 (c. 29) (cash recovery proceedings).”’.—[Mr. Coaker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Exempted data
‘Nothing in this Part authorises—
(a) the disclosure of data contained in—
(i) the National Identity Register (as defined in the Identity Cards Act 2006 (c. 15)), or
(ii) any database established pursuant to section 12 of the Children Act 2004 (c. 31) (information databases), or
(b) the use of such data in data matching exercises.’.—[Mr. Browne.]

Brought up, and read the First time.

Jeremy Browne: I beg to move, That the clause be read a Second time.
The new clause was suggested by Liberty, so perhaps the Minister will be sympathetic to it as he now quotes that organisation approvingly in his favour. It is designed to ensure that data from the national identity register and the children’s index cannot be used in data matching exercises under the Bill. Our concern is that allowing data from those sources to be used will lead to data mining. It is difficult to see the justification in arguing that that type of information is needed to detect fraud. On that basis, I put forward the new clause for the Committee’s consideration.

James Brokenshire: As the hon. Gentleman has explained, this provision is intended to prevent data mining. The Minister was keen to correct me as soon as I used the words data mining, saying that that was not the intention of the Bill and that it was about data matching rather than data mining. In the context of the remarks of the hon. Member for Taunton and the Minister’s clear desire to ensure that there is no confusion between mining and matching, I look forward with interest to the Minister’s comments on the new clause.

Vernon Coaker: I shall ask, at the end of my remarks, for the hon. Member for Taunton to ask leave to withdraw the motion. He has tabled an amendment that would prevent the use of information from the national identity register and ContactPoint in either the data sharing provided for in clause 63 or the data-matching exercises provided for in schedule 7.
I should like to make a general point about ContactPoint and the national identity register in relation to the data sharing and data matching provisions enabled by the Bill. In neither case will the public authorities responsible for the database or register be compelled to disclose information from them for the purpose of the prevention and detection of fraud. Therefore, the owners of the data—the Home Secretary in respect of the national identity register and the Secretary of State for Children, Schools and Families for ContactPoint—will retain absolute control over whether they choose to disclose or not.
The national identity register will hold identity information relating to everyone who is issued with an ID card. It is intended eventually to include everyone who is aged 16 and over and resident in the UK. As my noble and learned friend Baroness Scotland explained in the other place, the national identity register will comprise identity information such as name, address, date of birth and nationality. Although it will include photographs and biometric information, such as fingerprints, it will not comprise every single piece of personal data held by Government. That means that it will not contain criminal, medical or tax records.
It is possible that, through an order under section 20 of the Identity Cards Act 2006, information specified in an order and contained in the national identity register could be supplied to the Audit Commission or to a specified public authority, but only for purposes also set out in the order. It should be noted, however, that any order made under section 20 will be subject to the affirmative resolution procedure, requiring debate and agreement by both Houses of Parliament. Given the rigorous procedures that are already built into the 2006 Act, I can see no reason why we should include in the Bill a prohibition against ever using data from the national identity register. In the Government’s view, it would be short-sighted not even to contemplate the possibility that the national identity register might help in the prevention and detection of fraud in future, particularly given that one of the express statutory purposes of that register is the prevention and detection of crime.
ContactPoint will be a national online directory that will be available in local authorities in England by the end of 2008. It will consist of basic demographic data relating to children and the contact details of those who provide specialist services to them. ContactPoint has been designed to facilitate the provision of care and services to children in a co-ordinated way. Its purpose is expressly linked to the duties on local authorities and their partners to co-operate in improving the well-being of children and to safeguard and promote their welfare. The database will be subject to restricted access, confined to those who need it in connection with their work with children.
The Children Act 2004 gives the Secretary of State power to make regulations governing the disclosure of data to and from ContactPoint. Those regulations have been laid before Parliament and are subject to the affirmative resolution procedure. It is difficult to see how the data contained in ContactPoint would be relevant to the specific task of assisting in the prevention and detection of fraud. So even if the Department for Children, Schools and Families took the decision that data from ContactPoint should be included in data-matching exercises, the Audit Commission would still need to decide if that was appropriate. As things stand, the answer would be no. We cannot envisage circumstances in which ContactPoint would wish to become a member of a specified anti-fraud organisation under clause 63. Nevertheless, the Government think that it is unnecessary and perhaps would be unwise now to rule out once and for all the possibility of using ContactPoint data in the future for preventing or detecting fraud. I also made that point in respect of the national identity register.
As with the Identity Cards Act, important policy considerations have been carefully balanced in the Children Act, resulting in the decision to give the Secretary of State the task of making regulations, subject to the approval of Parliament, which set out the circumstances in which information from contact points may be disclosed. The Government would be loath to fetter or undermine in the Serious Crime Bill the way in which the provisions of the Children Act operate.
I remind the Committee that, following a Government amendment in the other place, the Audit Commission will not be able to undertake data matching in order to profile the propensity of individual adults or children to commit offences in future. The point was made by a number of Opposition peers, and the Bill has been changed in order to take into account their worries. That cannot, therefore, be held out as a reason for preventing the Audit Commission from accessing contact points or the national identity register. For those reasons, I would ask the hon. Member for Taunton to withdraw his amendment. It might be necessary in future to use the data, but there is nothing compulsory about it and it would have to be done with the agreement of the appropriate Secretaries of State.

Douglas Hogg: I hope that you will allow me a couple of minutes, Mr. Benton, to talk about the particulars that will be recorded on the national identity register. I do not want to go far outside the scope of the debate, but perhaps you will allow me three sentences that might do that. I have always been surprised that we have not been prepared to consider a DNA database. Having worked in the criminal law for many years, and been in the Home Office when DNA first came on stream, I have always thought that a national database for DNA would be the single most effective instrument for the prevention and detection of crime. While I recognise that there are considerable civil liberties issues to address, all parties should consider a DNA national database. We need to debate that; it would be much more effective than the identity card.

Jeremy Browne: The Minister concluded his helpful remarks by saying that he thought that it might be necessary in future to use the data. That touches on a wider public concern about the increased cross-referencing of information and data, and so-called function creep. For that reason, I am keen to test the views of the Committee by pressing the new clause to a vote.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 1, Noes 9.

Question accordingly negatived.

New Clause 5

Central record of serious crime prevention orders
‘A detailed central record shall be kept of every order made, varied or discharged under Part 1.’.—[James Brokenshire.]

Brought up, and read the First time.

James Brokenshire: I beg to move, That the clause be read a Second time.
We seek certain protections and assurances by virtue of this and other new clauses that we that we would like to add to the Bill. New clause 5 imposes a requirement for serious crime prevention orders to be recorded on a central register and for any order made to vary or discharge such orders also to be recorded on that register. We believe that that would be sensible, given the wide-ranging powers that the Government seek to take in relation to the Bill.
The Committee will be aware of the reservations that have been expressed by various hon. Members about the serious crime prevention orders. We need to ensure that a clear record is kept of how many of these orders are issued, given that only around 30 of them are expected to be allowed each year. We also need to monitor closely who is receiving the orders and what restrictions and terms are being imposed as a consequence.
As I have said, concerns have been expressed about the practicalities of what will happen if the orders are passed into law. Effective measures need to be in place to ensure that the Bill is not applied in a way that might subvert the criminal justice system. The Minister clearly said that the Bill is intended to be about protection, not prosecution. In other words, serious crime prevention orders are not intended to be an alternative prosecution system. In that context there needs to be a process to record and therefore to review how many orders are being given and on what terms. The best way to do that is to ensure that the orders are recorded in one place and so are readily available for that review and examination. On that basis I hope that the Committee will be minded to consider new clause 5 favourably.

Vernon Coaker: May I thank the hon. Member for Hornchurch and his colleagues for tabling this new clause because it gives me the opportunity to reiterate the commitment that was made by Lord Bassam in another place? In order for truly effective use of these orders, there will need to be a central record of appropriate information in relation to their use, especially for co-ordination between different branches of law enforcement and the different applicant authorities. In order for the record to be an effective tool, there will need to be extensive consultation with stakeholders to make sure that their needs are taken into account. We will also need to consult with the judiciary and we would want to ensure that any recording of the details of the operation of these orders would be entirely in accordance with data protection principles.
It would be inappropriate to include such a general provision in the Bill without having consulted those various bodies. If we are to come back to this on Report after the summer recess I hope to have completed this process of consideration and to be able to inform the House of how this will be done. In the light of the commitment to a record being kept that was made in another place and now in this House, I hope that the hon. Gentleman will understand why I will resist the amendment and why I will ask him to consider its withdrawal.

James Brokenshire: Can the Minister give any further details of the consultation that is taking place? While his acknowledgment that there is a need for a central register to be maintained is positive news, it would be helpful for the Committee to understand what the timing of the consultation is intended to be. He has mentioned certain stakeholders. But we need to be certain that the matter will be addressed by no later than Report stage to ensure that the protections that he has described are properly reflected in the Bill.

Vernon Coaker: I am trying to give the hon. Gentleman the reassurance that he seeks. We need to consult with the various stakeholders that I have mentioned. We want to bring something back on Report that reflects the new clause but we need to do so in liaison and consultation with our stakeholders. Given that the Report stage might well be after the summer recess, the consultation will have to take place in that period. That is our aim. The specifics of the consultation will depend on the sort of central record that would be appropriate. It should not be overly bureaucratic and should achieve our aims and those of the hon. Gentleman. We commit to return to the issue on Report. With those assurances, I hope that the hon. Gentleman feels able to withdraw his—if I may say—useful new clause.

James Brokenshire: In the light of the Minister’s helpful and, if I may say, kindly comments, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 6

Review of serious crime prevention orders
‘(1) The Secretary of State must appoint a person (“the independent reviewer”) to conduct an independent review of the operation of this Part.
(2) In conducting a review under subsection (1) above the independent reviewer shall have regard to the desirability of minimising the use of serious crime prevention orders except where they are necessary to protect the public by preventing, restricting or disrupting involvement in serious crime in circumstances where prosecutions cannot otherwise be pursued.
(3) The independent reviewer must send the Secretary of State a report on the outcome of a review under subsection (1) before the end of a period of 12 months beginning with the day on which this Act is passed, and before the end of each subsequent period of 12 months beginning with the day on which the first report was sent to the Secretary of State.
(4) The Secretary of State must lay before Parliament a copy of each report received under subsection (3) above.’.—[James Brokenshire.]

Brought up, and read the First time.

James Brokenshire: I beg to move, That the clause be read a Second time.
In the light of the Minister’s helpful comments on new clause 5, I hope that he will be as favourable to new clause 6, which relates to the review of serious crime prevention orders. The new clause would provide for an annual review of the orders. It is important that the mechanism exists to ensure that the orders are used proportionately and to provide reassurance that they will not become some sort of automatic substitution mechanism to bring prosecutions before the court in a different manner.
The Minister said that only a small number of orders—about 30—are expected each year. The new clause would allow the annual review of the number of orders to be independent. We have heard some significant, passionate concerns about what serious crime prevention orders will mean in the context of the criminal justice system. If the orders are to exist, they must be used in a way that promotes co-ordination between all law enforcement agencies, to provide the protection that the Minister said he intends to be part and parcel of the measures.
It is important to have a 12-monthly review, so that we can regularly examine the operation of the orders. It is easy in the Committee to look at the drafting of the Bill and say that the orders will be applied in a particular way. We are concerned about their practical operation and application, however. To provide reassurance as these matters proceed, it is therefore important to have such protection and to ensure that an independent reviewer is able to conduct analysis of the operation of the serious crime prevention orders, with regard to the desirability of minimising their use except where they are necessary to protect the public by preventing, restricting or disrupting involvement in serious crime in circumstances where prosecutions cannot be pursued. The Minister has said that that is the intention of the serious crime prevention orders. If that is the case, what can be wrong with an independent mechanism to ensure that that is what happens in practice? I hope that the Minister will consider the new clause favourably and, perhaps, kindly.

Vernon Coaker: I advise the hon. Gentleman not to get too carried away. The powers under the Bill will be exercised by the High Court. To say that it needs an independent reviewer to review its actions is inappropriate. I am more than confident in the ability of our senior judiciary to act appropriately. I also think that the amendment is unnecessary.
The purpose of such a reviewer, presumably, would be to ensure that the orders were being used in a way that was compatible with overriding imperatives, such as the European convention on human rights. I have full confidence that the High Court would always seek to act in such a way, and if the subject felt that it had not, there is already a perfectly suitable process for review of the decision: appeal to the Court of Appeal, followed by the House of Lords.
In addition, we have stated clearly several times that the orders will not be used as an alternative to prosecution—a suggestion alluded to in new clause 6(2). To underline that commitment, I point out that in no way can it be argued that the orders will be easy to obtain. Earlier in our deliberations, we went through, at some length, the various tests that are necessary before the High Court can make someone the subject of a serious crime prevention order. That is just as it should be, and it will mean that law enforcement bodies cannot use the orders as an easy alternative to prosecution. I ask the Committee not to support the creation of an expensive review process that would achieve nothing that the Bill and the existing judicial processes do not already achieve.
Although I do not support the notion of an expensive review of the orders that would achieve nothing that is not already provided for, we might consider before Report whether there is a way of combining the recording of information, which I have said that we will do, with some sort of reports deriving from that. I am not committing to doing that, but I am happy to consider doing so and to offer a commitment to return to this issue on Report.

James Brokenshire: I hear what the Minister says, but I think that, in many ways, he has missed the point. The new clause is not about questioning whether the judiciary would act appropriately or inappropriately; they will interpret the Bill as it is stated. The point is that there is some element of doubt about how the Bill could be interpreted, which means that they could go off in a different direction—hence the extensive debates that we have had on various aspects of the serious crime prevention orders.
The Minister also talked about the ease with which the orders will be obtained. We have had considerable debate on the burden and standard of proof that will be applied in relation to the orders, on whether there will be one test, and on where on the sliding scale such cases will be. That is clearly a matter for judicial interpretation and judgment, but it could be that the characteristics of the orders are slightly different from the way that they are expressed in the Bill. That is how the law emerges and develops. It has nothing to do with the appropriateness of the judiciary’s actions—they would be doing their job and interpreting the statute before us.
The point is that an independent review would ensure that the expressions of general intent were applied, and that we would proceed with that safeguard if it was possible to obtain a criminal prosecution. Any movement towards using the serious crime prevention orders in a way that detracts from the criminal justice process should be clearly understood and reported to Parliament as part of the review process proposed in new clause 6. On that basis, I am not satisfied by what the Minister has said and I would therefore like to test the Committee’s opinion of new clause 6.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes 4, Noes 9.

Question accordingly negatived.

New Clause 7

Limitation of serious crime prevention orders
‘(1) Part 1 of this Act and any orders made under it shall expire at the end of the period of 12 months beginning with the day on which this Act is passed unless the Secretary of State makes a renewal order under subsection (2) below.
(2) No renewal order may be made by the Secretary of State unless it has been laid before, and approved by a resolution of, each House of Parliament.
(3) A renewal order made under subsection (2) above shall expire at the end of the period of 12 months beginning with the day on which the order is made unless it is renewed by a further renewal order.
(4) No order may be made under this section unless a report has been laid before Parliament under section [Review of serious crime prevention orders] above.’.—[James Brokenshire.]

Brought up, and read the First time.

James Brokenshire: I beg to move, That the clause be read a Second time.
New clause 7 is a further protection that we seek regarding the operation of serious crime prevention orders. Under it, part 1 of the Bill, once enacted, would subject to annual renewal by order. This is a wide-ranging provision that could be quite significant, given the restrictions on the orders that may be placed. That may or may not be appropriate, but if this power is to be taken, there should be an obligation on Parliament to consider the operation of such orders, for the reasons that I gave in relation to new clauses 5 and 6.
I do not intend to repeat what I said about new clauses 5 and 6. However, new clause 7 would give a great deal of assurance regarding the various concerns expressed in the other place, outside the House and in this Committee. It would also give a positive role to Parliament in applying a robust examination of the operation of these orders, and provide an element of scrutiny of the manner in which serious crime prevention orders are being undertaken. One would have thought that that might find favour with the Prime Minister, given his views on strengthening the role of Parliament and on the functions of the Executive.
I urge the Committee to consider new clause 7 carefully. If the concerns expressed in this place and elsewhere regarding the manner in which the serious crime prevention orders operate prove to be the stronger argument, it would provide an additional protection and a mechanism for ensuring that changes can be made if required.

Vernon Coaker: Through the Committee’s deliberations, we have taken on board, not only in this place but in another place, points that the hon. Member for Hornchurch and his hon. Friends have made. There is clearly a difference of view on this new clause, and I do not want to repeat the arguments that I made regarding the last new clause—arguments that the hon. Gentleman found so unpersuasive, although many of the same points could indeed be made. Processes are in place regarding the operation of the judiciary, and although the hon. Gentleman does not agree, they provide the safeguard that he is seeking. Our view is that these orders will help law enforcement and prevent harm caused to communities by serious criminals. We believe that the safeguards, both legislative and procedural, provided by these orders are quite considerable. It is not appropriate to keep asking Parliament to reaffirm the House’s commitment to preventing, through the measures in the Bill, the harm caused by serious crime. I therefore ask the Committee to resist the new clause if the hon. Gentleman presses it to a vote.

James Brokenshire: I hear what the Minister has said but, needless to say, he will not be too surprised to learn that I am not satisfied by his response. He says that it is a question of ensuring that Parliament sends out a message about harm reduction, but that is not the point at issue. The issue is the extent to which the orders might go much further and tread on the remit of the criminal justice and prosecution sphere. That is why we believe, given the points that have been made about the operation of such orders, that the safeguards in new clause 7 are required. On that basis, I would like to test the Committee’s opinion on it.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes 4, 9.

Question accordingly negatived.

New Clause 10

Proceeds of crime (criminal lifestyle)
‘(1) Section 75 of the Proceeds of Crime Act 2002 (c. 29) (criminal lifestyle) is amended as follows.
(2) In subsection (2)(c), for “six months” substitute “three years”.
(3) In subsection (3)(a)—
(a) for “in the proceedings” substitute “prior to the proceedings”, and
(b) after “benefited”, insert “, and each of those offences was committed after 24th March 2003”.
(4) In subsection (3)(b)—
(a) for “two separate occasions” substitute “three separate occasions”, and
(b) after “benefited”, insert “, and at least one of those offences was committed after 24th March 2003 and before the date of any of the offences under section 6(2) of this Act”.
(5) In subsection (4) for “£5,000” substitute “£20,000”.—[Mr. Hogg.]

Brought up, and read the First time.

Douglas Hogg: I beg to move, That the clause be read a Second time.

Joe Benton: With this, it will be convenient to discuss amendment No. 169, in title, line 9, after ‘warrants’, insert—
‘and in relation to criminal lifestyle’.

Douglas Hogg: This is the last occasion that I rise to my feet in this debate. Therefore, may I begin by thanking you, Mr. Benton, for the way that you have chaired this Committee, and may I, through you, thank Mr. Bercow, who has also been a very good Chairman of this Committee? I also thank the Public Bill Office for the assistance that I have received. As you will have seen, Mr. Benton, I have drafted a huge number of amendments. The fact that they were in order and comprehensible owes a great deal to the Public Bill Office, to which I am very grateful.
I thank the two Ministers present—and the former Minister with responsibility for such matters, the hon. Member for Bradford, South (Mr. Sutcliffe)—for the courteous way in which they have responded. They know that there is a lot of this Bill that I do not agree with, in particular part 1. I shall be voting against it on Third Reading for that reason, whatever my right hon. and hon. Friends do. May I also thank my hon. Friends? It is always a pleasure to work with colleagues. We do not always agree, but I always enjoy working with my hon. Friends.
Having said all that, I shall come to new clause 10. I am bound to say that I am about to make the most boring speech that you have probably heard in this Committee, Mr. Benton. The only thing that I would say in its defence is that it will be brief, but dull it is—dull and technical.
I would like to make some preliminary points as I approach the task of addressing new clause 10. First, I do not expect the Minister to accept what I have drafted, nor indeed do I intend to put the new clause or the amendment to the vote. My purpose is simply to point out that we have put into legislation measures capable of causing injustice, and to point out that the fact that the injustice is being done to those who are proven criminals in no sense prevents it from being an injustice. One can do injustice to criminals, and we need to keep that well in mind. The problem, of course, is that one often closes one’s mind to that injustice, because the people involved are proven criminals.
My purpose in moving the new clause is to interest the Home Office—or is it now the Ministry of Justice?—in what I believe to be an injustice, and also perhaps to get the Law Commission, in time, to examine this matter. My interest in this issue was stimulated by a professional case that I was involved with just a few weeks ago. I do not expect members of this Committee to be familiar with the relevant legislation. I make no complaint about that—nor was I, until I became involved in that case.
I will briefly tell the Committee the facts of the case, which are necessary for the understanding of the new clause. I was involved in the case on behalf of a police officer who, rather surprisingly, was allowed to work part-time as an estate agent. I am bound to say that I find that quite remarkable. He did so with the authority of the Metropolitan police commission. He was working two days a week as a detective and the rest of the time he was an estate agent—very rum indeed. He was an estate agent who owned a lot of property, in respect of which he received a great deal of rent, most of it in cash. So this was a very surprising situation indeed.
In any event, he was convicted, on his own plea, of mortgage frauds, in respect of which he had gained some £70,000. The offences were committed over about 12 months, there were six relevant counts, and the conviction was on a plea of guilty. My client was sentenced to a term of imprisonment of about three years. I emphasise that the term of imprisonment was the punishment. It should be distinguished in kind from confiscation, which is intended to be not punishment but the removal of ill-gotten gains. It is important to keep it in mind that confiscation is not intended to be an additional penalty.
I want to focus on the confiscation proceedings, which are the subject of the new clause. The net worth of the officer after conviction was about £500,000, once account had been taken of his debts, particularly mortgage debts; because of the Proceeds of Crime Act 2002, it is very likely that although his benefit from the fraud was £70,000, he will be ordered to forfeit all his net worth. In other words, following a conviction for an offence in which he obtained £70,000, the probability is that he will lose all his net worth of £500,000. The confiscation proceedings have not yet been dealt with, but that is the likely outcome. That is the result of the legislation, which is very complex.
There are lots of ifs, buts and provisos, but for simplicity and brevity I will touch on just a few bits of the relevant legislation, the 2002 Act, which was modelled on the preceding drug trafficking legislation. Incidentally, I think the criteria used ought to be different but in many respects they are the same.
A court must make a confiscation order when a person is convicted of an offence and the court is satisfied that the defendant has a criminal lifestyle. That is the effect of section 6 of the 2002 Act. To start with, the court has to determine the benefit that the defendant has gained from his criminal lifestyle and a process is embarked upon. It means, in effect, that the value of all the benefits that the defendant has received over a period of six years is to be deemed as benefit except to the extent that he can show that he has obtained them honestly. One takes an overall figure of the total benefit that he has received during the relevant six-year period, discounts those that he can show he has come by honestly, and the benefit that is left is regarded as the relevant amount. If the defendant has net assets that are the same or less than the benefits, he will be deemed to forfeit the lot.
There are two reasons to fear the injustice. First, one asks rhetorically what is a criminal lifestyle, a definition of which is to be found in section 75 of the 2002 Act. It is not the only criterion, but it includes the following: if in one set of proceedings the defendant was convicted of three or more offences from which he has benefited or, alternatively or additionally, if over a relevant six years he has been convicted on at least two separate occasions of an offence from which he has benefited. If either of those two situations applies, he is deemed to have had a criminal lifestyle and the confiscation procedure grinds into operation.
The court will then examine the defendant’s financial dealings over the previous six years and he will be deemed to have benefited from all the revenue and benefits that he has received over that period except those that he can show he came by legitimately. If his net worth is the same or less than the deemed benefit, the entire net worth will be forfeited.
The injustice arises in the following respects. First, the presumptions arise on a very inadequate basis. In my client’s case, they arose from the fact that on a plea of guilty he was convicted of more than three offences committed over a l2-month period. That was sufficient to establish a criminal lifestyle. His gain from those offences was valued at about £70,000. However, because of the deeming provisions of the 2002 Act, the value of the benefits, assessed over a six-year period, was over £1 million, which he could not immediately explain. Because the net worth of the benefits is some £500,000, he is liable to lose the lot. It is not right that the presumption should come into play on such a fragile basis. Three offences over a 12-month period should not give rise to a rebuttable presumption that his income over six years was gained from illegal activity, nor, in such circumstances, should the court be able to oblige him to forfeit a sum that is substantially in excess of the proven gain from the offences for which he was convicted. Also, as a matter of natural justice, the process should not be triggered by a conviction for three or more offences on one indictment, when the defendant in question has no previous conviction that would have put him on notice as to the risk of confiscation. My new clause takes express notice of that.
Those of us who are on pay-as-you-earn—all of us here are—or who are in receipt of regular dividend income, or who have to account to the Revenue for the value added tax on all fees received, as I do as a part-time barrister, have no great difficulty in establishing the sources of our income and we have relevant documents to prove it. However, we will see that another potential cause of injustice arises if we put ourselves in the position of someone in the cash economy. The cash economy can involve income either on a large or a small scale; that person could be a plumber—that might be on a large scale these days, but historically speaking it has been fairly modest—or it could be someone like my client, who was receiving enormous sums of money in rent from tenants. Within the cash economy, it is quite difficult to prove sources of income comprehensively and satisfactorily to the court, with the burden of proof resting on the defendant. Therefore, while I suspect that my client’s sources of income were in many respects lawful, he will be hard pushed to show that they are so. As a result, he will find that the court confiscates much more than it should, as a consequence of the legislation that we have put in place.
I acknowledge that my client is a proven criminal; I do not doubt that for a moment. He pleaded guilty and there may be other crimes to his name, for all I know. I also accept that he was not prepared to pay tax that he ought to have paid, and that is another factor that no doubt comes into play. However, I have the strong impression that, because of the way we have framed the legislation, and in particular because we have used the model of the Drug Trafficking Act 1994 to catch many other offences, including mortgage fraud, we will require people to pay much more by way of confiscation than is proper, and certainly much more than the benefit that they have received from their unlawful activity.
I return to my original point, that confiscation is not intended to be an additional penalty; it is intended only to remove ill-gotten gains. That is in part to protect the public, and also because it offends the public that criminals should retain their ill-gotten gains. We are at risk of doing much more than removing those gains, however. The purpose of the new clause and the amendment is to highlight that point, and to try to get some sensible argument and discussion of whether we have gone too far. In other words, it is to stimulate debate. I would be quite content if it has that effect. I am not seeking actually to change the law on this occasion and I shall not, for these purposes, be pressing the new clause.

James Brokenshire: I rise briefly to thank and to pay tribute to the work of my right hon. and learned Friend the Member for Sleaford and North Hykeham, in relation not only to the new clause, but to the other amendments that he has brought forward during the Committee debates, and to his contributions in support of the arguments that we have advanced. He has made an interesting, well-considered point that was well argued and well explained, as one would have expected based on his contributions throughout. He raises an interesting point, designed, as he says, to provoke debate. He has certainly done that today in highlighting this issue and moving this new clause. We shall see how the matter progresses, and I shall note with interest the Minister’s response to his detailed legal arguments and the way in which he set them out.

Vernon Coaker: I start by thanking the right hon. and learned Member for Sleaford and North Hykeham for the measured way in which he put forward his new clause, and for the important issues that he raised.
The point about trying to stimulate debate on some of the issues is important. From what I have seen, both in power and in opposition in various guises on councils, one might stimulate debate and a year or two or three later, lo and behold, somebody somewhere takes notice. Victory is not immediate, but it does sometimes arrive.
In its four years of operation, the Proceeds of Crime Act 2002 has resulted in the recovery of a considerable amount of criminal wealth. A record £125 million was recovered in the past financial year. That represents a substantial year-on-year increase and a fivefold increase over the previous five years. That is a significant success, but we do not want to rest on our laurels. We want to double the annual recovery to £250 million by 2010. Confiscation following criminal conviction is a core part of our efforts to deprive criminals of their ill-gotten gains. The new clause, as the right hon. and learned Gentleman points out, seeks to dilute the provisions that provide important tools to ensure that that occurs.
Under the 2002 Act, a court assumes that a defendant who has a criminal lifestyle funds his entire wealth by crime. Consequently, the value of the defendant’s assets is available to be reckoned into a confiscation order. The alternative is for only the direct gain from the offence of which the defendant was convicted to be available for confiscation. As the right hon. and learned Gentleman pointed out, criminal lifestyle is defined in several different ways. Some defendants are found guilty of specific offences, such as people trafficking and money laundering. Other criteria, based on the number and pattern of prosecutions, tend to show that a defendant is a career criminal.
The new clause would amend the qualifying criteria. It provides that an offence needs to have occurred over three years rather than six months. It would also alter the test for deciding whether a person has engaged in conduct that forms part of a course of criminal activity defined in section 75(3)(a) of the 2002 Act. First, the conviction of three or more other offences would have to have occurred prior to the proceedings on which a confiscation order was considered.

Douglas Hogg: May I just explain the reason for that? If the Minister looks at the mandatory penalties for burglars, he will find that there has to be a prior conviction that puts the burglar on notice before the mandatory offence comes into play. That is the sort of thinking that has informed the amendment.

Vernon Coaker: I thank the right hon. and learned Gentleman for his further helpful clarification of his point.
Secondly, at least one of the offences would have to have been committed in the period between 24 March 2003 and the date on which the offence giving rise to the confiscation order was committed. There is also an existing safeguard in that the criminal lifestyle test is met only if, in addition to meeting the tests that I have set out, the defendant has benefited to a certain monetary value. The new clause seeks to raise the threshold from £5,000 to £20,000.
Experience of the operation of the 2002 Act is that although the criminal lifestyle provisions have been in force for four years, there has been no opposition to their operation. Similar provisions operated in previous confiscation legislation. The operation of the provisions has not, to our knowledge, been challenged in the courts.
I am convinced that the tests set out are already high enough, and that only a career criminal could qualify as having a criminal lifestyle. It is also significant that even if a defendant was deemed to have such a lifestyle, he would have the opportunity to show the court evidence that his assets and property were not the proceeds of crime. They would then not be subject to confiscation. Furthermore, the courts have discretion on whether to include the value of assets if there is a serious risk of injustice.
I draw the attention of the right hon. and learned Gentleman and the Committee to section 10(6) of the 2002 Act, which specifically states that the court can ignore the value of assets if it believes that not doing so could result in a serious injustice. It is also significant that the courts are bound by the Human Rights Act to dispose of their duties in a way that complies with the defendant’s rights under the European convention of human rights. Again, I am unaware of any human rights challenges having been brought under that provision.
The benefit figure of £5,000 is significant enough to catch career criminals. I am confident that the concept of the criminal lifestyle and the operation of those provisions in court are not draconian. However, I am grateful to the right hon. and learned Gentleman for the new clause, as it causes us to think again and to justify the legislation continually. He said that he would not press the new clause, but I am grateful to him for giving me the opportunity to reply to the debate.

Douglas Hogg: I am grateful to the Minister for his reply. I would be grateful if it caused his officials to ponder—and perhaps to take account of the views of the judges.
I shall make two points. First, on career criminals, I do not think the Minister is right. In the end, it comes down to definitions. In my client’s case, the offences covered 12 months or thereabouts, and although there were a number of counts there was only one indictment. I would be inclined not to regard a person who committed offences over a 12-month period as a career criminal. I would take a different view if we were dealing with a man who had committed offences over two, three or four years. That would be different, but my case dealt with a range of offences, quite narrow in compass, within a certain time frame. One needs to consider whether the provision catches people who are not career criminals. That is my view.
Secondly—it is a small point about section 10(6) of the 2002 Act—there is a settled authority on the matter. The courts are not entitled to disregard the process, or indeed the sums, simply on the basis that is unfair. Once they have embarked upon the process, it has to grind through. They cannot simply say that the overall effect is unfair and not do anything.
I hope that we will give further thought to the matter. I recognise that people like my client are not the immediate source of compassion or sympathy. We are dealing with proven criminals. However, injustice can be done even to proven criminals and it is the business of this House to try not to do so. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Title

Amendments made: No. 197, in title, line 3, after ‘fraud’, insert
‘or for purposes relating to proceeds of crime’.
No. 198, in title, line 9, after ‘investigators’, insert
‘, management receivers and enforcement receivers,’.
No. 240, in title, line 9, after ‘investigators’, insert ‘, cash recovery proceedings’.—[Mr. Coaker.]

Joe Benton: There is an item concerning written evidence. I have to inform the Committee that none has been received.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Vernon Coaker: May I take the opportunity to thank you, Mr. Benton, and your co-Chairman, Mr. Bercow, for conducting our proceedings in a way that has shown Parliament in a good light? The debate has been important and of generally a high quality. Although this is an area in which people feel passionately and strongly, the debate has been conducted in a reasonable manner. You, Mr. Benton, and your co-Chair have helped in that.
May I take the opportunity to thank all the officers in the House, and the Clerk in particular? Given the speed with which we race through the amendments, it is astonishing that anyone can lay it out in way that keeps us in order. Therefore, may I thank all the officers in their different guises who have contributed to the Committee?
May I also thank my own officials? A number of them have helped me enormously and I would like to place on the record my thanks to all of them and to the outside organisations that have contributed to our deliberations.
I would also like to thank members of the Committee, including the Whip, the Lord Commissioner of Her Majesty's Treasury, my hon. Friend the Member for Tynemouth; the Under-Secretary of State for Justice, my hon. Friend the Member for Liverpool, Garston, who came late to the Bill but whose mastery of part 2 was something for us all to hear; the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), who was on the Committee before; and all my hon. Friends for staying the course and being a part of this Committee.
I also thank the hon. Members for Taunton and for North Cornwall for their contributions, the hon. Member for Hornchurch for his constructive and thoughtful contributions to the debate, and the hon. Member for Arundel and South Downs (Nick Herbert) before that. As I said at the start, although there were obvious disagreements between us all, the hon. Member for Hornchurch expressed his opinions in a forthright and forceful way, with both conviction and passion. He is a great credit to his party.
It would be wrong of me to conclude without thanking the right hon. and learned Member for Sleaford and North Hykeham, who has helped me to develop a knowledge of the law that I never would have thought possible. I understand the term is pupil barrister. The pupil part may be right, but I am not so sure about the barrister. He has shown how important parliamentary scrutiny is to a Bill. A good level of scrutiny from both the Opposition and the Government leads to an improved Bill.
All that is left for me to say is that I have enjoyed the experience immensely and would like to thank everyone whom I have not thanked. It is a bit like being at a wedding and worrying that someone has been left out. Therefore, if I have left anyone out, may I thank them as well?

James Brokenshire: May I thank you, Mr. Benton, for your chairmanship of the Committee? Will you also pass on my thanks to Mr. Bercow? You have both chaired the sittings in a well-judged, even-handed and good-humoured way. May I also pass on my thanks to the Clerk, and the Clerks in the Public Bill Office for dealing with the range of amendments that we have had before us, and the Hansard Reporters for taking down all of the technical and case details and legalistic arguments.
I also thank the police and the Doorkeepers for maintaining our safety and security during our deliberations, and the Under-Secretary of State for the Home Department, the hon. Member for Gedling, his colleagues and the Bill team and other officials for the manner in which they responded to our inquiries and questions. We might not have got all our desired responses in relation to the Bill, but I wish to record my thanks for the manner in which they responded to the points that we raised.
We have made some progress on the Bill, although not as much as we would have liked. Considerable uncertainties remain, particularly about the scope, ambit and likely impact of serious crime prevention orders. The Minister has frequently said that they are not intended to apply where prosecution could be brought, but that remains to be tested. We are concerned, because some of the safeguards that we wished to include were not taken forward. Issues of data sharing and data matching remain to be considered. In the context of the Privy Council review on terrorism, we need to examine carefully the Government’s deletion of the provisions on intercept evidence. Similarly, we will reflect on the discussions on gun crime that took place in this morning’s sitting.
I thank my right hon. and hon. Friends for their learned, informed and considered contributions, which have added to the Committee. They have raised a number of important issues, on which I am sure that the Government will reflect as the Bill continues its progress through the House. I thank my Whip, the hon. Member for Reigate, in his absence for his helpful support and assistance and for the cheerful manner of his response to certain points about the work of Whips that have been made in the Committee.
This has been a thoughtful Committee and a number of serious, relevant points have been made. I trust that the Minister will reflect on our deliberations and table amendments to address those matters when the Bill returns to the Floor of the House. We shall await developments with interest, in anticipation of a positive response that will address the points that have been highlighted during the Committee’s deliberations. Ultimately, we need to ensure that the public are protected effectively from serious criminals who are intent on harming them, their livelihoods and their way of life.

Joe Benton: On behalf of Mr. Bercow and myself, I thank the Minister and Opposition Members for their kind remarks. I should like to place on the record my appreciation for the services of the learned Clerk, Hansard and everybody connected with the Committee. It has been an interesting Committee. I thank hon. Members for that and for their kind remarks.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at seventeen minutes to One o’clock.